Cryptocurrency needs electricity from an entire country: record high after record high – but the Bitcoin rally has a dirty side
The bitcoin rush of the past few months has also skyrocketed electricity consumption for finding new digital coins. Meanwhile, the miners of the cryptocurrency consume almost as much electricity as the whole of the Netherlands – with a worrying environmental balance.
92.8 terawatts – that’s how much electricity Bitcoin miners used this year, estimates the Center for Alternative Finance at Cambridge University in Great Britain. That is more than all Belgian residents consumed in the past year and around a sixth of all German electricity consumption.
Bitcoin consumes electricity when so-called “miners” have hash values calculated using special software. These are long sequences of numbers and letters. If a previously defined hash value is calculated, the person whose PC has determined it receives a bonus in the form of newly created Bitcoin. He also uses it to verify a certain number of money transfers in the blockchain network, which can also earn him fees.
With the sharp rise in price – Bitcoins are 276 percent more expensive today than at the beginning of the year – mining activities have also increased. At the end of October, the electricity consumption was 54 terawatts, but it has almost doubled since then.
China and USA have the most bitcoin miners
The University of Cambridge can only roughly estimate the electricity consumption. The only public information is in which countries hash values are calculated. The researchers take this data and compare it with the average electricity consumption values in a country for the necessary hardware. Because even though the number of Bitcoin miners has increased significantly due to the price rally, the power hunger of the technology used for this has decreased.
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Nevertheless, the researchers have bad news: The electricity used for Bitcoin is unlikely to be clean. That’s because China is by far the country with the most miners. Although the Middle Kingdom wants to convert its electricity production to renewable energies, more than 50 percent of the electricity here is still produced in coal-fired power plants. In second place on the miner list is the USA, which is also weak in the expansion of renewable energy. Behind them are Russia and Kazakhstan, two nations rich in oil and natural gas.
74 percent of Bitcoin miners work sustainably
This has consequences: In the US, 25 organizations filed a lawsuit against the small town of Torrey in New York State on Monday. The city council recently allowed the expansion of a gas-fired power plant that already supplies around 7000 mining PCs with electricity on its premises. The plaintiffs want to defend themselves against the expansion because cooling water has to be taken from a nearby lake, which is fed back in hot and thus harms the local flora and fauna. After the expansion, the power plant operator wants to mine Bitcoins worth 50,000 dollars every day.
Earning money from the Bitcoin boom [Anzeige]
Bitcoin more than doubled in 2020 – and the prospects for a further increase are good. On December 8th Bitcoin expert Jörg Hermsdorf explained what the drivers of the rally are and how you can best invest in Bitcoin. Record it HERE!
Overall, digging for bitcoins is a surprisingly green affair. Last year, the analysis company CoinShares presented a report that 74 percent of Bitcoin mining computers are already powered by renewable energies. However, this value was four percent higher a year earlier.
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